When the new fiscal year begins July 1, and subject to budget approval, University of Michigan employees will again be eligible for merit raises following a yearlong salary freeze and campus units will be able to begin to fill critical faculty and staff vacancies.

Provost Susan M. Collins made the announcement Feb. 26 during the live campus COVID-19 briefing, but she also cautioned that uncertainty about university finances remains.

Separately, Michigan Medicine announced it would reactivate salaries and benefits that were paused during the pandemic.

Collins, who is both the chief budget officer and chief academic officer for the Ann Arbor campus, prefaced her announcement by acknowledging and thanking the university community “for their individual and collective efforts to preserve financial resources as we navigate through the pandemic.”

She said that with the July 1 start of the 2021-22 fiscal year, and pending Board of Regents approval of a proposed budget in June, the spending plan would provide for:

  • A modest merit salary increase program for faculty and staff “in recognition of the extraordinary work they have done and continue to do.”
  • A resumption of “prudent levels of new faculty recruitment,” with searches beginning in the next academic year.
  • A resumption of staff hiring, “in a measured way, to meet critical needs across campus” that have resulted from leaving positions unfilled.
Watch the video of the Feb. 26 campus COVID-19 briefing, beginning with the section in which Provost Susan M. Collins outlines plans to ease pandemic-related spending restrictions later this year.

“We want to acknowledge the burdens felt and the sacrifices made by our faculty and staff, which reflect their dedication to the University of Michigan,” Collins said.

“The salary and hiring freezes have affected individuals across the institution, and we are grateful for your tenacity and commitment to providing our students with the best educational experience possible, to continuing to pursue innovative research and discovery, and to providing the support and infrastructure that makes U-M a great public research university.”

The provost said the pandemic has resulted in revenue losses in many areas of the university and substantial new costs have been incurred. Much uncertainty remains about state funding in the year ahead, and pandemic-related expenses continue to mount. Collins noted that there also are some positive signs that will allow the university to modify its financial constraints.

Collins cited stable enrollment during the current academic year, strong demand for a U-M education from prospective students for the coming year and a much more stable financial outlook at Michigan Medicine as factors that underpin her optimism. She said applications for admission for the fall 2021 incoming class are up 26 percent.

“We are optimistic that our financial situation is on course, and in that context we are very pleased to share our plan to modify some of the spending restrictions that were put into place last spring in response to the significant financial impacts of the pandemic,” the provost said.

She said these changes will mark a partial return to more decentralized decision making — putting spending decisions where the mission is implemented.

“Individual units may continue to impose restrictions in some areas based on their priorities and budget situation, and we expect all units to be thoughtful and judicious in their decision-making to ensure a balanced budget,” she added.

At Michigan Medicine, Executive Vice President for Medical Affairs Marschall S. Runge wrote in an email message to employees that Michigan Medicine was “reinvesting in employees” by returning additional benefits to follow the retirement match, which was restored in December 2020.

In his message to employees, Runge said, “You have played a critical role in helping Michigan Medicine return to routine operations and a stable and positive financial outlook for the current fiscal year. Thank you for your ongoing commitment to our mission of advancing care for Michigan and the world, especially during the peaks and valleys of COVID-19.”

Among the items he announced were:

  • Competitive pay adjustments. Beginning in March, Michigan Medicine will start the process to assess market pay rates to ensure eligible employees are paid competitively. Michigan Medicine also will make labor market adjustments for select job classifications, and plan to continue these assessments on an annual basis.
  • PTO sell-back. In May 2021, Michigan Medicine will resume the paid time off sell-back program of up to 40 hours.
  • Tuition reimbursements will be reinstated for health system employees with eligible enrollments effective May 1. There will be no retroactive payments and no advanced payments for classes prior to or for summer semesters starting in May.
  • Departments and units may return to 100 percent use of professional development funds beginning with activities occurring on or after July 1.
  • A merit pay program will take place in fall 2021.
  • The temporary salary freeze will be lifted Sept. 1.

“Together, we have demonstrated that our teamwork and collaborative spirit can find solutions to even the most complex issues, and I have no doubt that will continue in the future,” Runge said.

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